Farm visas are not the answer to labour shortages

Joanna Howe, Associate Professor at the University of Adelaide Law School, has given an insightful interview on ABC Radio challenging the farming industry’s heavy reliance on seasonal migrant workers.

In particular, Howe notes that visa reforms by the Howard Government that gave farmers greater access to migrant workers “completely changed the nature of the workforce” by pushing Australians out of these jobs and ushering the exploitation and wage theft so prevalent across the industry:

“Over the last two decades, the Howard government visa extensions for backpackers who work in horticulture and the seasonal worker program for Pacific Island workers completely changed the nature of the workforce”…

“That prompted the Australians who worked in the industry, including grey nomads, school leavers and long-term horticulture workers to leave and find other work”…

“Horticulture is an industry where there’s non-compliance with Labour standards… which skews the labour market downwards”…

“If the labour standards were enforced, you would see more Australians [back] in the industry”…

As we know, there is abundant evidence of temporary migrants being ruthlessly exploited on Australia’s farms. Many Australian farms have also flat out refused to employ local workers because they have to be paid a legal wage and are far less easy to exploit.

As MB keeps explaining, allowing Australia’s farmers to pluck cheap foreign workers en masse is bad for both wages and long-run productivity.

Australia’s mining industry is world-class and attracts workers to far out places by paying excellent wages.

Cut off the migrant slave labour pipeline and Australian farms will be forced to raise wages. In turn, this will drive farms to automate and lift productivity, boosting both profits and wages.

However, if the government allows farms to continue relying heavily on cheap foreign labour, then capital will shallow, productivity will stagnate, and both wages and profits will decline.

There’s a reason why farms in advanced nations are more likely to involve a handful of workers operating heavy machinery, whereas in low-wage developing countries farms are manned by many workers doing manual labour.

The higher cost of labour in advanced countries forces farms to invest in labour saving machinery, which lifts productivity.

If farm margins are so weak then they should be forced to consolidate, driving economies of scale, improved productivity, and higher profit margins.

The key ingredient for Australian agriculture to flourish is productivity-enhancing automation, not migrant slave labour.

Australians are not inherently lazy. But they do know when they are being exploited and paid slave wages.

Australia’s farm sector coped just fine pre-2000 before the migrant slave labour tap was turned on.

Unconventional Economist

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